United States v. Charter Inter. Oil, 1st Cir. (1996)

7/26/2019 United States v. Charter Inter. Oil, 1st Cir. (1996)

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USCA1 Opinion

United States Court of Appeals

For the First Circuit

____________________

No. 95-1961

No. 95-1984

No. 95-2019

UNITED STATES OF AMERICA,

Plaintiff, Appellee,

v.

CHARTER INTERNATIONAL OIL COMPANY,

Defendant, Appellant.


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____________________

ACUSHNET COMPANY, ET AL.,

Proposed Intervenors-Appellees.

____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Robert E. Keeton, U.S. District Judge] ___________________

____________________

Before

Cyr, Boudin, and Lynch, Circuit Judges. ______________

____________________

David B. Broughel, with whom Jeffrey B. Renton, and Day,_________________ __________________ ____

Howard were on brief, for appellant, Charter Internation


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______

Company.

David M. Jones, with whom Roger C. Zehntner, Irene C._______________ __________________ _________

Phoebe S. Gallagher and Kirkpatrick & Lockhart were on bri____________________ _______________________

proposed intervenors-appellees, Acushnet et al.


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Evelyn S. Ying, Attorney, United States Department of_______________

with whom Lois J. Schiffer, Assistant Attorney General, Da __________________ _

Beckhard and David C. Shilton, Attorneys, United States Depart ________ ________________

Justice, were on brief, for the United States as appellee.

____________________

May 9, 1996

____________________


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LYNCH, Circuit Judge. The clean-up of a Superfu LYNCH, Circuit Judge. ______________

hazardous waste site in New Bedford, Massachusetts is large

being accomplished and funded through agreements t

government has reached with private parties who bear so

legal responsibility for the wastes at the site. Tho

agreements, by law, must be approved by the United Stat

Courts as being fair, reasonable, and consistent with t


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purposes of CERCLA, the Comprehensive Environmental Respons

Compensation and Liability Act. Multiples of millions

dollars are involved in these settlements and the stakes a

high, both for the public and for the parties involved. T

allocation of responsibility for payment of those millions

as between the public treasury and the private sector a

amongst the private players themselves -- has given rise

complicated settlement dynamics. Those settlements a

subject to both the court approval mechanism enacted

Congress and to specific statutory clauses providing for (a

protecting against) contribution by some of the potential

responsible parties ("PRPs") to the settlement sums paid

other such parties.

The question presented here is whether the distri


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court abused its discretion in approving a CERCLA conse

decree between the government and Charter International

Company arising out of the Sullivan's Ledge Superfund Sit

What is unusual is that the government and Charter disagre

-2- 2


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in a very fundamental sense on interpretation of the conse

decree. This, in turn, raises the issue of the extent

which the scope of "matters addressed" in the decree,

issue usually resolved in separate contribution actions,

required to be determined by the district court in i

approval of the consent decree.

Under the rubric of approval of the decree, two se

of private parties here attempt to battle out the ultima

allocation of contribution liability in a clean-up with cos

estimated to be in the order of $50 million. Charter ur

that the district court erred in rejecting i

interpretation, which would give Charter comple

contribution protection against prior settlors for i

payment of $215,000 plus interest. The Acushnet Grou


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comprised of prior settling parties who have instituted su

a contribution action against Charter, urges that t

district court erred in not resolving all contributi

questions in the course of approving the decree.

We affirm the district court's order.

The Sullivan's Ledge Superfund Site ___________________________________

An old granite quarry in New Bedford was used as

waste disposal area by the city from 1935 to the 1970

Local industries disposed of their wastes, includi

hazardous substances, into four pits, extending as deep in

the bedrock as 150 feet. The contaminants from the wast

-3- 3


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spread to adjacent areas, including some wetlands known

Middle Marsh.

In 1984, the EPA placed the area, known as t

Sullivan's Ledge Site, on the National Priorities List. S

40 C.F.R. Pt. 300, App. B. It began its Remedi

Investigation and Feasibility Study of the two "operab

units" on the Site: the entire Site save for the Middle Mar


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("first unit") and the Middle Marsh ("second unit"). The E

found significant hazardous substances in the groundwate

soils, and sediments of both units.

In June 1989 EPA issued its Record of Decision ("

I") as to the first unit, calling for excavation

contaminated soils and sediments, construction of

impermeable cap over the disposal area, groundwater treatme

and wetlands remediation. The government sued fourteen P

with respect to the first unit (the Acushnet Group),

settled. See United States v. Acushnet Co., Civ. No. 9 ___ _____________ ____________

10706-K (D. Mass.). The district court entered a conse

decree approving and finalizing the settlement (the "19

Decree").


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Under the terms of the 1991 Decree, the Acushn

Group paid $620,000 to the government for past costs incurr

in connection with ROD I. The Group also agreed to perfo

the ROD I remedy, including the first thirty years

operation and maintenance, and to pay all of the EP

-4- 4


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oversight costs for the first five years and half of i

oversight costs through the thirtieth year.

On September 27, 1991, after completing its study

the contamination in the Middle Marsh wetlands area, the E

issued its remedy for the second unit ("ROD II"). On Apr

26, 1993, the district court entered a consent decr

approving the settlement between the government and fifte

PRPs (the Acushnet Group and the City of New Bedfor

United States v. AVX Corp., Civ. No. 93-10104-K (D. Mass _____________ _________

(the "1993 Decree"). The 1993 settlors agreed to perform t

remedy set forth in ROD II and to pay half of the EP

oversight costs with respect to the second unit.

Charter was offered the opportunity to participate


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the 1991 Decree but declined it, saying that the price t

was too high for what it believed its liability to be. T

parties to both the 1991 and 1993 Decrees understood that t

government had a larger total claim relating to the Site t

the recovery it had obtained from the initial settlors a

that the government planned to seek further recovery fr

parties who had not yet settled. That is exactly what t

government did, bringing a series of lawsuits against no

settling PRPs,1 including suit against Charter.

____________________

1. The government brought a cost recovery suit for i

shortfall on the first unit against two non-settlors. Unit ___

States v. Cornell-Dubilier Electronics, Inc., Civ. No. 9

______ ___________________________________

11865-K (D. Mass.). The initial Cornell-Dubilier complai ________________


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sought approximately $2.8 million and a declaratory judgme

-5- 5

Proceedings Against Charter ___________________________

The government pursued Charter under a theory

successor liability for a company, Pacific Oil, which

dumped soot from oil burners into the Sullivan's Le

landfill.2 In June 1992 the government initiat


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independent settlement negotiations with Charter.

December 2, 1993, the proposed consent decree was lodged

the district court and notice was published in the Feder

Register.3 58 Fed. Reg. 65,397 (Dec. 14, 1993).

____________________

that the defendants were liable for the government's futu

response costs not covered by the 1991 Decree. After ent

of the 1993 Decree, the government amended its Cornel _____

Dubilier complaint, adding three new defendants and seeki ________

an additional $1 million for costs relating to the seco

unit. The City of New Bedford, a defendant in Cornel _____

Dubilier, has agreed to a proposed decree for unrecover

________

costs from the first unit in satisfaction of the clai

asserted against it in the Cornell-Dubilier suit. ________________

Similarly, seeking to recover its claims against parti

not settling in the initial rounds, the Acushnet Group fil

suit against twelve parties, excluding Charter. See Acushn ___ _____

Co. v. Coaters, Inc., Civ. No. 93-11219-K (D. Mass.).


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___ _____________

2. Charter disputes the contention that the soot contain

high concentration levels of hazardous substances. Furthe

there were two companies that used the name "Pacific Oil

Durfee Fuels, a Massachusetts corporation and Pacific

Company, a Rhode Island corporation. Charter claims that

was Durfee Fuels (to which it was not a successor) and n

the Pacific Oil Company (to which it was) that dumped t

soot.

3. Section 122(d)(2) of CERCLA requires the Attorney Gener

to provide persons who are not parties to a proposed conse

decree an opportunity to comment on the proposed conse

decree "before its entry by the court as a final judgment

42 U.S.C. 9622(d)(2)(B). Further, the Attorney General

obligated to "consider, and file with the court, any writt

comments, views, or allegations relating to the propos

-6- 6


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response, the Acushnet Group filed comments voicing i

concern that the decree might be interpreted to affo

Charter contribution protection against the claims

settlors in the 1991 and 1993 Decrees. Charter responded

turn, asserting that the prior settlors' contribution clai

against it were indeed impaired by the decree. In Augu

1994, the government made it clear to Charter that i

position was that the decree did not grant Charter comple ___

contribution protection against the claims of prior settlo


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and that it would press this interpretation with the cour

Given their differing interpretations of the decree, t

government offered to let Charter withdraw, but Chart

declined.

On February 2, 1995, the government moved for ent

of the Charter consent decree. It presented to the distri

court its position that the decree did not provide Chart

with complete contribution protection against prior settlor

The district court consolidated the consent decree action a

the contribution action filed by the Acushnet Group again

Charter for the limited purpose of conducting a hearing

determine the impact of the contribution protection issue

entry of the decree. The Acushnet Group objected in t

government's case to entry of the decree, but only if t


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____________________

judgment." Id.___

-7- 7

decree were interpreted to provide Charter with comple

contribution protection.4


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At the consolidated hearing, the court hea

arguments on the proper interpretation of the decree.

gave Charter another opportunity to withdraw from the decre

but Charter again declined. The district court entered t

decree, rejecting Charter's assertion that the decr

afforded it complete contribution protection against pri

settlors. The Acushnet Group's contribution action again

Charter is currently pending before the district court. S

Acushnet Co. v. Charter Int'l Oil, Civ. No. 94-10989-REK ( _____________ _________________

Mass.).

The Consent Decree on Appeal ____________________________

Two questions are raised by this appeal. The fir

is whether the district court abused its discretion


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approving the consent decree.5 See United States___ ______________

DiBiase, 45 F.3d 541, 544 (1st Cir. 1995). The second

_______

whether its interpretation of the decree was correct,

question which, to the extent it involves issues of la

____________________

4. Charter's answer to the Acushnet Group's complaint

contribution asserted that the claims were barred because t

proposed decree between Charter and the government wou

provide full contribution protection to Charter under Secti

113(f)(2) of CERCLA, 42 U.S.C. 9613(f)(2).

5. Although jurisdictional issues over the Acushn

Group's proposed "intervention" in this appeal lurk in t

background, we need not resolve them since the Group

challenge fails on the merits. See Menorah Ins. Co. v. I ___ _________________

Reins. Corp., 72 F.3d 218, 223 n.9 (1st Cir. 1995).____________

-8- 8


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calls for fuller appellate review. See AMF, Inc. v. Jewet ___ _________ ____

711 F.2d 1096, 1100-01 (1st Cir. 1983). On the facts of t

case, the first question cannot be answered witho

addressing the second.

In approving a consent decree, the district cou

must determine three things: that the decree is fair, t

it is reasonable, and that it is faithful to the purpos


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that CERCLA is intended to serve. DiBiase, 45 F.3d at 54 _______

United States v. Cannons Eng'g Corp., 899 F.2d 79, 85 (1 ______________ ____________________

Cir. 1990). This assessment entails, in part, an apprais

of what the government is being given by the PRP relative

what the PRP is receiving. What is being given by the PRP

clear: $215,000 plus interest. It is what is being recei

which implicates the district court's interpretation of t

decree and the issue of contribution protection.

We turn to the statutory scheme. In enacting t

1986 amendments to CERCLA known as SARA (the Superfu

Amendments and Reauthorization Act of 1986), Congre

provided settling parties with certain immunity from lat

contribution actions arising from "matters addressed" in t


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consent decree. Cannons, 899 F.2d at 91; 42 U.S.C._______

9613(f)(2). As to such matters, "only the amount of t

settlement -- not the pro rata share attributable to t ___ ____

settling party -- [is] subtracted from the liability of t

non settlors." Cannons, 899 F.2d at 91. _______

-9- 9


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Thus, because approval of a consent decree un

CERCLA results in contribution protection to the settli

party, it also affects the rights of PRPs who are not parti

to the decree. The contribution issue, in turn, depends

the scope of "matters addressed" in the settlement, for:

A person who has resolved its liability to

the United States . . . in a judicially

approved settlement shall not be liable for

claims for contribution regarding matters _______

addressed in the settlement. Such settlement _________

does not discharge any of the other

potentially liable persons unless its terms

so provide, but it reduces the potential

liability of the others by the amount of the

settlement.

42 U.S.C. 9613(f)(2) (emphasis added).


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This statutory framework contemplates that PRPs

do not join in a first-round settlement will be left with t

risk of bearing a disproportionate share of liabilit

"Disproportionate liability, a technique which promotes ear

settlements and deters litigation for litigation's sake,

an integral part of the statutory plan." Cannons, 899 F. _______

at 92.

Further, the legislative history of SARA shows t

Congress contemplated that there would be partial settlemen

which would leave settling parties liable for matters n

addressed in the agreement:

This protection attaches only to matters that

the settling party has resolved with the

[government]. Thus, in cases of partial

settlements where, for example, a party has


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settled with the [government] for a surface

-10- 10

clean up, the settling party shall not be

subject to any contribution claim for the

surface clean up by any party. The settlor

may, however, remain liable in such instances

for other clean up action or costs not

addressed by the settlement such as, in this

example, a subsurface clean up.

Statement of Senator Stafford (sponsor of S. 51, the Sena


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bill for the 1986 SARA Amendments), 131 Cong. Rec. 24,4

(1985).

Here, two groups are settlors and each seeks,

opposite sides of the coin, the value of the contributi

proviso. The Acushnet Group, which settled earlier, wan

its contribution rights against Charter arising from t

Sullivan's Ledge Site clean-up maximized. Charter, a lat

settlor, wants to cut off all contribution claims against i

For purposes of establishing the scope of contributi

protection afforded to Charter by the decree under 42 U.S.

9613(f)(2), it would be necessary to determine the scope

"matters addressed" by the decree.

This case, however, involves approval of a conse


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decree and is not a suit for contribution. The distri

court believed, as do we, that it was required to resol

only certain aspects of the dispute over "matters addresse

in order to fulfill its responsibilities in evaluating t

consent decree. Not every aspect of interpretation of

consent decree (or even the precise contours of "matte

addressed") need be resolved in the course of approval of t

-11- 11


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decree.6 Rather, the court must address so much of t

interpretation of the consent decree as needed to rule on t

decree's fairness, reasonableness and fidelity to t

statute.7 See United States v. Charles George Truckin ___ ______________ ______________________

Inc., 34 F.3d 1081, 1088-89 (1st Cir. 1994). There may____

prudential reasons, as this case demonstrates, not to resol

more as to "matters addressed" than is necessary. Su

reasons, for example, may be related to uncertainty as to t

specific fact situations in which contribution claims

arise or to the absence of parties whose interests may

affected.8 As Aristotle noted, wisdom does not seek f


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____________________

6. For example, in order to achieve an agreement the parti

may, on relatively minor matters, engage in purposef

ambiguity, leaving to another day a battle which may ne

need to be fought. If that ambiguity is not material to t

tripartite test for approving a consent decree, it would n

be necessary to resolve it. Perforce, it may be preferab

to leave it unresolved.

7. Although the option was open to it, the district cou

chose not to consolidate the approval of the consent decr

and the contribution action, for all purposes. Distri

courts may find such a consolidation useful, if the cases

warrant, to expedite and clarify matters. But they are n

required to do so. See Fed. R. Civ. P. 42(a); 9 Moore ___ ____

Federal Practice 42.02.________________

8. The arguments of the Acushnet Group and Charter, that t

district court was required to determine in the course

approving the consent decree all aspects of all possib

contribution claims, prove too much. The district cou

noted that "[t]o the extent that there is uncertainty abo

the precise implication" that the settlement agreement

have, "it may be necessary in later proceedings for this


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another court to interpret both the statute and t

agreement." It would have been premature for the distri

court to issue a broad order without specific facts on whi

to base its ruling. Cf. Charles George Trucking, 34 F.3d

___ _______________________

-12- 12

greater precision than the nature of the subject admit

Aristotle, Nicomachean Ethics I.3, 1094b23-28 (Martin Ostwa __________________

ed. & trans., 1962).


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Interpretation of the Decree ____________________________

We dispose first of an initial argument. The Unit

States urges that, by consenting to entry of the decre

Charter has waived its right to challenge the distri

court's interpretation of the decree. We disagree. "[I]t______________

possible for a party to consent to a judgment and sti

preserve his right to appeal," so long as he "reserve[s] t

right unequivocally." Coughlin v. Regan, 768 F.2d 468, 4 ________ _____

(1st Cir. 1985). Charter's Notice of Objection makes cle

that it objected to, and intended to preserve its right

appeal, any interpretation of the decree that afforded

less than full protection against contribution claims arisi

out of the Sullivan's Ledge Site. That suffices.


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Charter says the decree must be interpreted so t

the "matters addressed" by it encompass all aspects of t

clean-up and remediation of the Sullivan's Ledge Sit

including all "matters addressed" in the 1991 and 19

Decrees. Charter argues, consequently, that it cannot

reached for contribution at all. The government says t

____________________

1088. The district court was also appropriately concern

that not all potentially affected parties were before i

The district court did what was necessary in order to deci

the issues on approval of the decree and it was certainly n

error to go no further.

-13- 13


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the "matters addressed" in the Charter decree do not inclu

the clean-up work that the prior settlors are performi

under their consent decrees. Therefore, it asserts that t

Charter decree does not cut off completely the contributi

rights of prior settling parties against Charter un

Section 113(f) of CERCLA for costs of remediation of t

Site. The government further says that the "matte

addressed" in the consent decree encompass only t

government's "remainder" case against Charter for t


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portion of the overall site liability that was not address

in the prior settlements, i.e., the government's claim f

____

the past and future response costs that were not reimburs

or covered by the prior settlements and for implementation

those aspects of RODs I and II that are not performed by t

prior settlors.

The district court did rule on this dispute as

"matters addressed," and ruled against Charter. It le

other aspects to be resolved in the parallel contributi

action brought by the Acushnet Group against Charter.

In reviewing the district court's ruling on t

"matters addressed" by the decree we look to the decree

"four corners." See United States v. Armour & Co., 402 U. ___ _____________ ____________


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673, 681-82 (1971). In United States v. ITT Continent _____________ _____________

Baking Co., 420 U.S. 223 (1975), the Court expounded on t __________

"four corners" rule of Armour: ______

-14- 14

Since a consent decree or order is to be


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construed for enforcement purposes basically

as a contract, reliance upon certain aids to

construction is proper, as with any contract.

Such aids include the circumstances

surrounding the formation of the consent

order, any technical meaning words used may

have had to the parties, and any other

documents expressly incorporated in the

decree.

Id. at 238. ___

The district court held that it would not interpr

the decree as Charter contended and that such

interpretation "would be extreme in its consequence as

what the government gave up compared with t

disproportionately small cash sum the government received

return." It further stated that such an interpretation wou

be "disapproved as contrary to the public interest."


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The determination of interpretation of the decree

iterative and proceeds incrementally, as in most areas

law, with priorities for reaching different levels

analysis. Cf. Lomas Mortgage, Inc., v. Louis, No. 95-195 ___ ____________________ _____

__ F.3d __, __, slip op. at 9-10 (1st Cir. 1996) (statuto

interpretation starts with the plain meaning of the statut

but where the statute is ambiguous, legislative history

be considered); Massachusetts v. Blackstone Valley Elec. Co _____________ _________________________

67 F.3d 981, 987 (1st Cir. 1995) (same). As in most contra

interpretation questions, we start here with the text. S

Fashion House, Inc. v. K Mart Corp., 892 F.2d 1076, 1083 (1 ___________________ ____________

Cir. 1989).


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-15- 15

Unfortunately, apparently due to EPA policy at t

time,9 there is no explicit "matters addressed" clause

the agreement. Charter argues that, nonetheless, t

district court should have interpreted "matters addresse

broadly in light of the contribution protection and covena

not to sue clauses of the agreement, as well as extrins


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evidence, particularly of the parties' negotiating history.

In the absence of explicit language, the parti

agree, citing to contribution cases from other circuits, o

must first look elsewhere to determine "matters addresse

Different circuits have taken somewhat different approache

In Akzo Coatings, Inc. v. Aigner Corp., 30 F.3d 761 (7th Ci ___________________ ____________

1994), the Seventh Circuit started with the decree itsel

and, in the absence of an express "matters addressed" clau

looked to various factors including "the particular locatio

time frame, hazardous substances, and clean-up costs cover

by the agreement." Id. at 766. That court recognized, o ___

a dissent, that its "flexible, fact-based approach" would n

offer the "settling parties the same degree of repose as o


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____________________

9. The absence of specific language concerning "matte

addressed" might be thought to be of concern to the EPA a

the public. Having the scope of "matters addresse

specifically agreed upon should lead to greater certainty a

finality. That certainty and finality are attracti

inducements to settle. The uncertainty and continui

litigation which this case exemplifies could reasonably

thought to be a deterrent to others to settle with t

government. Charter advises us that the EPA, in 199

changed its policy to require that "matters addressed"

specified.

-16- 16


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based solely on the facial breadth of the decree." Id.

___

767-68. The dissent preferred a broader reading, reasoni

that more comprehensive contribution protection would lead

more settlements. See id. at 773 (Easterbrook,___ ___

dissenting). The Tenth Circuit in United States v. Colora _____________ _____

& Eastern R.R. Co., 50 F.3d 1530, 1538 (10th Cir. 1995), to __________________

a related "fact-specific approach," laying the earlier a

the later "consent decrees [and the

attachments] . . . . side by side and comparing the matte

covered in relation to the remediation completed . . . .

the date of the [second] consent decree."


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We reject any argument that Section 113(f)(

itself warrants a broad understanding of "matters addresse

by the decree, just as Colorado & Eastern, 50 F.3d at 153 __________________

38, and Akzo, 30 F.3d at 765, 770, rejected this argumen ____

The statute does not dictate any particular method f

assessing the scope of the decree. See Akzo, 30 F.3d at 76 ___ ____

Thus, the district court appropriately rejected Charter

argument based on paragraph 16 of the proposed decree, whi

provides:

With regard to claims for contribution

against [Charter] for matters addressed in

this Consent Decree the parties hereto agree

that [Charter] is entitled to such protection

from contribution actions or claims as is

provided by CERCLA Section 113(f)(2), 42

U.S.C. 9613(f)(2).


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-17- 17

This language simply repeats the statutory contributi

language of Section 113(f)(2), without defining "matte

addressed." Charter says that this language in the decr

would be meaningless unless its interpretation is adopte


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That is not so. The language may provide protection

Charter should the government later recover from ot

parties a part of its claim.

We confine ourselves to the text of the decree a

find the answer there, thus not reaching the issue of w

other interpretive guides, if any, are permissible un

CERCLA. We are unpersuaded by Charter's argument that t

text of the decree supports its reading. We believe that t

text of the decree as to: (i) the scope of the clai

purported to be brought and settled; (ii) the definition

the response costs being reimbursed by the settlement; a

(iii) the explicit references to the prior decree

forecloses Charter's interpretation.


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Charter relies heavily on the decree's covenant n

to sue clause, which prevents the government from sui

Charter "pursuant to Sections 106 and 107(a) of CERCLA a

Section 7003 of RCRA relating to the Site, including f

reimbursement of Response costs or for implementation of

I or ROD II." But that the government has promised not

sue Charter says nothing about the intention as to whet

other, prior settling parties were to have their rights

-18- 18


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contribution against Charter extinguished by this agreemen

The one does not necessarily follow from the other.

Untoward and congressionally unintended consequenc

would flow from Charter's reading. As the Seventh Circu

observed in Akzo: ____

If the covenant not to sue alone were held to

be determinative of the scope of contribution

protection, the United States would not be

free to release settling parties from further

litigation with the United States, without

unavoidably cutting off all private party

claims for response costs.

30 F.3d at 766 (quoting brief of United States as amicus

We agree. The government may have reasons to give suc


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covenant unrelated to an intent to grant broad contributi

protection against prior settlors.

We find dispositive instead the text of the decr

establishing that Charter was sued on the government

remainder case, that the government sought and Charter agre

to reimburse the government for its response costs as to t

remainder case, and that the remainder case was defin

against the backdrop of the prior settlements.

The text describing the scope of the claims to

brought and settled undermines Charter's propos

interpretation:

The United States in its complaint seeks

reimbursement of response costs incurred and

to be incurred by EPA and the Department of

Justice for response actions in connection


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with the release or threatened release of

hazardous substances at the Sullivan's Ledge

Superfund Site in New Bedford, Bristol

-19- 19

County, Massachusetts . . . and a declaration

of the defendants' liability for further

response costs.

Neither the complaint nor the decree asserts a claim again


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Charter for the remediation work being done by the Acushn

Group. A reading of a decree which far exceeds the reli

sought by plaintiffs' complaint would be strained a

doubtful. See Navarro-Ayala v. Hernandez-Colon, 951 F. ___ _____________ _______________

1325, 1341 (1st Cir. 1991). Even crediting the argument t

some settlements may exceed the boundaries of claims made

the complaint,10 there is nothing in this decree to lead

that result.11

____________________

10. Cf. Charles George Trucking, 34 F.3d at 1090 (conse

___ ________________________

decree may resolve claims for damages not plea

specifically, if the parties so intend, so long as the clai

are within the general scope of the pleadings).

11. We note the potential problem of the government n

honoring its agreement with prior settlors by collusive

agreeing with subsequent settlors on language in the


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agreement broader than the claims the government made again

those subsequent settlors. Cf. Akzo, 30 F.3d at 7 ___ ____

(Easterbrook, J., dissenting) (making an analogous poi

about the government inducing PRPs to enter large settlemen

with promises of broad contribution protection and then lat

urging the district court to arrive at a narrow readin

That is not this case. The district court here expressed i

skepticism that the earlier settlement empowered t

government to do whatever it wished about impairing t

contribution rights that were retained by the prior settli

parties. The government has expressly disavowed any su

intention.

In addition, the government has a serious disincenti

to collude with later settlors to cut off the rights of pri

settlors just to extract a higher second-round settlement

a single clean-up proceeding. It is the government that

the repeat player in the world of CERCLA clean-ups. Shou ______

the government develop a reputation for cheating ear

settlors, that would deter settlements in later clean-u

-20- 20


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The definition of response costs in the decree al

does not support Charter's interpretation. The decr

defines Charter's $215,000 payment as being "in reimburseme

of Response Costs," which are defined as the government _________

response costs. The decree says "the United States

incurred, and will continue to incur, response costs whi

have not been recovered under the 1991 Consent Decree or t

1993 Consent Decree." The decree estimates the government

shortfall to exceed $4 million in such response costs. T


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decree also indicates that the government evaluated t

$215,000 to be paid by Charter in terms of these unrecover

costs of at least $4 million and the risk that so

remediation work may not be completed by other settlors. T

amount was not evaluated against the total costs of clean-

at the Sullivan's Ledge Site.

Further, as the government points out, the Chart

decree explicitly refers to the earlier decrees. In t

prior settlements the Acushnet Group did not give up t

right to seek contribution from those who were not part

those settlements. The prior settlements are explicit

referenced and described in the Charter decree. Under su

circumstances we may consider these prior settlements


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interpreting the decree. Cf. ITT Continental Baking, 4 ___ _______________________

____________________

(and reduce the amounts early-round settlors are willing

pay) and hence, in the long run, hurt the government

interests.

-21- 21

U.S. at 238. In light of these considerations, we hold t


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the text of the decree supports the government

interpretation and not Charter's and so affirm the distri

court's ruling on this point.

Charter argues that the decree is ambiguous and t

extrinsic evidence of the negotiating history of the parti

demonstrates that Charter was intended to be protected fr

all contribution claims. Cf. Thomas Hobbes, Leviathan Ch.___ _________

at 84 (Michael Oakeshott ed. 1962) (1651) (men ca

indeterminate that which they wish to contest because t

have interests at stake). While in routine contra

interpretation extrinsic evidence may be considered when t

disputed terms are ambiguous, we do not find the decr

ambiguous, and such evidence may not be considered

contradict the written terms of the agreement. See Brenn


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___ ____

v. Carvel Corp., 929 F.2d 801, 808 (1st Cir. 1991). ____________

Even so, we doubt, but do not decide, whether

interpreting a CERCLA consent decree it would be appropria

to rely on the type of extrinsic evidence Charter proffer

This court has at times considered certain types of extrins

evidence in interpreting decrees in public institution ci

rights actions. See Navarro-Ayola, 951 F.2d at 1343. B ___ _____________

CERCLA settlements, unlike ordinary contract formation, ta

place in a unique statutory framework. That framewo

requires that before a decree is entered by the court, noti

-22- 22


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of the decree be published, there be an opportunity f

public comment, and that the Attorney General take account

the commentary and reserve the right to withhold conse

should the commentary show the decree to be inappropriat

42 U.S.C. 9622(d)(2). That public comment is part of t

record before the district court. Id. The statuto ___

structure thus assumes that the public will be given acce


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to the relevant documentary information on the decree. T

evidence of the negotiating history which Charter proffer

was not within the information the public had available.12

It is worth asking why the court should enter

consent decree when there was a fundamental dispute over t

effect of the decree. There are two responses. The first

that Charter expressed its intent to live with whate

interpretation the court ultimately gave the decree. There

no unfairness to Charter. When Charter said that it had n

understood the government's position to be that Charter wou

not be afforded complete contribution protection, t

government offered to allow Charter to withdraw from t

agreement. Charter declined. Charter knew the governme


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would present a contrary interpretation to the distri

____________________

12. Even were we to adopt Charter's method of analysis,

see nothing in the negotiating materials that indicates t

the government intended to undercut its earlier settlemen

with the Acushnet Group or that it ever agreed with Charter

view on the scope of contribution protection afforded by t

decree.

-23- 23


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court. Charter also knew that courts are required to gi

some deference to the judgment of the Attorney General t

the settlement is appropriate.13 Charles George Truckin ______________________

34 F.3d at 1085. In addition, the district court ga

Charter the opportunity to withdraw from the settlement

the face of a contrary government position and the court

statement that it would most likely rule against Charter

interpretation. Charter again declined. Counsel for Chart

informed the court that, win or lose in its interpretation

the decree, Charter preferred to have an agreement with t

government. Such an agreement, Charter acknowledged, wou

both provide it with some contribution protection and get

out of costly litigation with the government. Indeed,


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appeal, Charter does not ask us to vacate the decree. Rat

its position is that the decree should be upheld and that i

interpretation should be substituted for that of the distri

court.

Second, while a different case might lead to

different result, we think that the policies behind CERC

are better served here by holding Charter to the consequenc

of its roll of the dice. Perhaps mindful of the hu

____________________

13. We reject the Acushnet Group's argument that t

district court is required to defer to the Attorney General

judgment to the extent of exercising no independent judgme

of its own. See Charles George Trucking, 34 F.3d at 10 ___ ________________________

(although in entering a decree a district court must defer

the EPA's judgment and to the parties' agreement, it has

responsibility to exercise its independent judgment).


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-24- 24

resources going into the transactions costs of CERC

litigation, rather than to remediating the sites,

Congress sought in SARA to encourage earlier resolutions

agreement. See United States v. SCA Servs. of Ind., Inc ___ _____________ _______________________

827 F. Supp. 526, 530-31 (N.D. Ind. 1993). If a party we

permitted to use the consent decree process to delay, whet


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in good faith or by design, and then to undo a decree

saying its understanding of the base terms was differen

then the congressional purposes would be undercut. C

Menorah, 72 F.3d at 223. Given that Charter voluntari _______

chose to consent to the decree, despite the significant ri

of an interpretation contrary to its interests, it was n

unreasonable for the district court to have entered t

decree.

Approval of the Consent Decree ______________________________

There was no abuse of discretion by the distri

court in approving the decree, as based on the government

____________________


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14. See Jan Paul Acton & Lloyd S. Dixon, Superfund a ___ ___________

Transaction Costs: The Experience of Insurers and Very Lar __________________________________________________________

Industrial Firms 32 (1992)(estimating that of t __________________

approximately $470 million paid in 1989 by insurers f

hazardous waste clean-ups, 88% went to legal costs); see al ___ _

Lloyd S. Dixon, The Transactions Costs Generated

______________________________________

Superfund's Liability Approach 183, in Analyzing Superfun _______________________________ __ _________________

Economics, Science and Law, (Richard L. Revesz & Richard___________________________

Stewart eds., 1995)(noting that for 1991 alone the priva

sector incurred over $4 billion in transactions costs

William N. Hedeman et al., Superfund Transaction Costs:____________________________

Critical Perspective on the Superfund Liability Scheme,_________________________________________________________

Envtl. L. Rep. 10413, 10423 (1991) (30-60% of hazardous was

clean-up funds go to lawyers).

-25- 25


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interpretation. We note that Charter does not serious

challenge on this point, preferring to argue that i

interpretation is mandated and that its interpretation mee

the tripartite test. The district court, before enterin

consent decree, is obliged to determine that it is fai

reasonable and consistent with the goals of CERCLA. DiBias _____

45 F.3d at 543; Cannons, 899 F.2d at 85. In turn, " _______

appellate court may overturn a district court's decision

approve or reject the entry of a CERCLA consent decree on


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for manifest abuse of discretion." Charles George Truckin _____________________

34 F.3d at 1085.

Under the terms of the decree Charter agreed to p

$215,000 plus interest, in settlement of the government

claims of approximately $4 million in unrecovered respon

costs for the first and second units. In exchange t

government covenanted not to sue or take administrati

action against Charter "pursuant to Sections 106 and 107(

of CERCLA or Section 7003 of RCRA relating to the Sit

including for reimbursement of Response Costs

implementation of ROD I or ROD II."15 Charter al

____________________

15. The government's covenant not to sue is subject


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certain reservations, including: (a) that with respect

future liability, the covenant not to sue does not come in

effect until certification by the EPA that remedial acti

for the site under ROD I and Rod II is completed; and (

reopener provisions which allow the government to se

further relief if previously unknown conditions

information reveal that the remedial actions for the site a

not protective of human health or the environment.

-26- 26

receives protection against contribution claims of ot


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parties from whom the government might subsequently reco ____________

all or part of its multi-million dollar remainder claim.

Fairness & Reasonableness _________________________

Fairness has a procedural component (involving t

negotiation process, see Cannons, 899 F.2d at 85), which___ _______

not at issue here, and a substantive component, which i

Id. at 86. "Substantive fairness introduces into t ___

equation concepts of corrective justice and accountabilit

a party should bear the cost of the harm for which it

legally responsible . . . . The logic behind these concep

dictates that settlement terms must be based upon, a

roughly correlated with, some acceptable measure

comparative fault, apportioning liability among the settli


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parties according to rational (if necessarily imprecis

estimates of how much harm each PRP has done." Cannons, 8 _______

F.2d at 87 (citations omitted); see also Charles Geor ___ ____ ____________

Trucking, 34 F.3d at 1089 (so long as the basis for________

sensible "approximation `roughly correlated with so

acceptable measure of comparative fault'" exist

"difficulties in achieving precise measurements

comparative fault will not preclude a trial court fr

entering a consent decree" (quoting Cannons, 899 F.2d_______

87)).


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-27- 27

A district court's reasonableness inquiry, like t

of fairness, is a pragmatic one, not requiring preci

calculations. See Charles George Trucking 34 F.3d at 10 ___ ________________________

(depth of inquiry depends on the context and informati

available to the court). The question is whether the decr

provides for an efficient clean-up and adequately compensat


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the public for its costs, in light of the foreseeable ris

of loss. See Cannons, 899 F.2d at 89-90. Because the firs ___ _______

round settlors have already contracted to implement t

clean-up, we review only the adequacy and efficiency

implementing the cash settlement reached here. This amoun

to asking whether the terms of the settlement are roug

proportional to Charter's responsibility and whether t

serve the public interest.

Approval of Charter's cash-out settlement of $215,0

plus interest in exchange for both limited contributi

protection and a limited covenant not to sue from t

government cannot be said to constitute a manifest abuse

discretion. Although $215,000 is small in absolute terms


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compared to the government's total unrecovered response cos

of $4 million, it must be evaluated in context.

particular, Charter's liability in this case was uncertai

It was not clear whether Pacific Oil, the company which

contributed to the wastes at the Site, was Charter

predecessor. The degree to which the predecessor's wastes

-28- 28


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soot from oil fuel -- contained hazardous substances t

would have contributed to the Site's contamination was al

at issue. Given the potentially high costs of litigatin

difficult case against Charter and the benefit of a certa

cash settlement (and the limited contribution protection

the $215,000 plus interest payment passes muster. This cou

explained in Cannons: _______

In a nutshell, the reasonableness of a

proposed settlement must take into account

foreseeable risks of loss. . . . The same

variable, we suggest, has a further

dimension: even if the government's case is

sturdy, it may take time and money to collect

damages or to implement private remedial

measures through litigatory success. To the

extent that time is of essence or that

transaction costs loom large, a settlement


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which nets less than full recovery of clean-

up costs is nonetheless reasonable. . . .

The reality is that, all too often,

litigation is a cost-ineffective alternative

which can squander valuable resources, public

as well as private.

899 F.2d at 90 (citations omitted). In addition, there a

other non-first-round settlors against whom the government

currently seeking to recover the remainder of its $4 milli

claim.

The question arises as to whether the decree,

entered, unfairly hurts the interests of third parties. S

Charles George Trucking, 34 F.3d 1085-89 (addressing thir _______________________

party challenge to entry of CERCLA consent decree).

purposes of our review, the district court's determinati

that the decree does not represent a complete bar


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-29- 29

contribution claims that first-round settlors expected

have against those that did not settle along with them

adequate to pass the abuse of discretion threshold.16 C

Charles George Trucking, at 1088 (in entering a decree________________________


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might be better to leave technical disputes between settli

parties in a class to the discourse between them). As to t

extinguished contribution claims of non-settlors or lat

round settlors, protection against those claims was

reasonable benefit Charter acquired in exchange for settli

before those others.

Fidelity to the Statute _______________________

As we noted in Cannons, the two major policy concer _______

underlying CERCLA are ensuring that prompt and effecti

clean-ups are put into place and making sure that the P

responsible for the hazards created bear their approxima

share of the responsibility. 899 F.2d at 89-91; cf. Unit ___ ___

States v. Rohm & Haas Co., 721 F.Supp. 666, 680 (D. N. ______ _________________


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1989) (noting Congress' goal of expediting effective remedi

____________________

16. In the separate contribution action between the Acushn

Group and Charter, Charter had asserted that the conse

decree provided it with an affirmative defense against t

Acushnet Group's contribution claims. The Acushnet Group,

turn, moved for summary judgment on the issue of whether t

decree afforded Charter such a defense. The district cou

denied the motion without ruling on its merits. It

basically that motion that the parties want us to deci

However, absent unusual circumstances, denial of a summa

judgment motion is not independently appealable as a fin

order. See Pedraza v. Shell Oil Co., 942 F.2d 48, 54-55 (1 ___ _______ _____________

Cir. 1991), cert. denied, 502 U.S. 1082 (1992). No su _____ ______

circumstances exist here.

-30- 30


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action and minimizing litigation). Both these goals and t

honoring of the settlement dynamics Congress created in S

are effectuated here.

CERCLA, through Section 113(f)(2), provides settli

parties with broad contribution protection so as to encoura

them to settle early. See Browning-Ferris, 33 F.3d at 10

___ _______________

03. However, CERCLA also aims to induce those parties

settle earlier to do so for higher amounts than they mi

otherwise by assuring them the right to seek contributi


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protection from those who have not as yet settled.17 S

42 U.S.C. 9613(3)(B); see also S. Rep. No. 11, 99th Con ___ ____

1st Sess. 44 (1985); cf. Colorado & Eastern, 50 F.3d at 15 ___ __________________

(Section 113(f)(1) was intended to enable those bearin

disproportionate share of the liability in a clean-up

recover from others). Hence, a decree that is read not

provide second-round settlors with complete contributi

protection against prior settlors is consistent with the go

of enabling the government to enter into early and lar

____________________

17. An early cash-out settlement may sometimes require t

settling party to pay a premium for the risks the governme

bears out of the uncertainty of the total cost of the reme

As more is known about the site and as the government deci

on the precise remedy, that uncertainty, and hence t


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premium, is reduced, but not eliminated. Here, there were

settlements until the RODs were issued and the remedy

outlined. Nonetheless, early settlors, even post-ROD,

pay some premium. Settlors who actually perform the reme

such as the Acushnet Group, assume the risks of the actu

costs of performance. Congress may well have thought it fa

to require later settlors to bear a share of those risks a

premiums.

-31- 31

settlements. Cf. Akzo, 30 F.3d 767 (interpreting "matte ___ ____


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addressed" clause of decree not to bar the claims of a P

that had undertaken remedial work prior to entry of t

decree); United States v. Alcan Aluminum, Inc., 25 F. ______________ _____________________

1174, 1186 n.17 (3d Cir. 1994) (in light of the goal

promoting early large settlements, the assertion of

contribution defense by a second-round settlor against

first-round settlor is far more problematic than i

assertion against a non-settlor).

Conclusion __________

The district court's order entering the conse

decree is affirmed. ________


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-32- 32


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United States v. Charter Inter. Oil, 1st Cir. (1996)

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